Business Analysis : Athletic Apparel

Competitors in the industry can wreak havoc on the bottom line for a company. With rivals, a price competition usually ensues, which benefits the customers but hurts the competing businesses that share a common strategy. In reviewing rival sellers, many competitors exist within the sports apparel and footwear industry, but most of them are unable to compete with the industry giants, Nike and Adidas. They are well seated in the industry and their sales reveal this ultimate strength, however, Under Armour is putting pressure on these mammoths. In 2015, global sales of sports clothing and footwear equated to $250 billion, of which Nike grabbed $30.6 billion, Adidas held in its grasp $18.8 billion and Under Armour had a much smaller piece of the pie, at $3.9 billion globally. In reviewing these numbers, it looks like Under Armour is really subpar to the industry giants, but this is not exactly the case. Under Armour in the past couple of

Nike; one of the most well known companies across the globe today is most known for being the world’s #1 shoemaker. They design and sell shoes for a variety of sports including baseball, golf, tennis and football. Nike also sells dress and casual shoes as well as athletic apparel and equipment for almost every sport imaginable. In addition Nike also operates NIKETOWN shoe and sportswear stores, factory outlets along with Nike women shops. One of Nike’s biggest competitors on the rise is Under Armour, Inc. Under Armour; the primary maker of performance athletic underwear and apparel has risen to the top with main competitor Nike. The company has also begun to become a factor in the footwear market as

Athletic apparel has come a long way from the era of pairing a dowdy gray cotton sweatsuit with tennis shoes. Now, athletic apparel promise to hug the body with materials that insulate the wearer from cold weather, while wicking away sweat to boost performance. Running shoes can be synced with computers to measure performance. Other advances in sports apparel include tagless T-shirts and fabrics that manage odors. Technological advancements allow manufacturers to maintain or increase prices and keep consumers loyal to their brands. Consumers have responded to the high-tech offerings, with athletic apparel sales reaching $60 billion in 2008, according to NPD Consumer estimated data. In this report, we analyze two apparel

Under Armour’s business strategy towards market segmentation is broken down into three different basis; Age, Gender, Uses. The first major market segmentation is by age, different age groups demand different products and Under Armour has produced certain merchandise to appeal to each generation. The second is Gender, both male and female respectively make up roughly 50% of the market equally.To appeal to females UA produces apparel in brighter colo, as a fashion forward athletic wear. While for males they they cater toward masculine vibe of tight fitting and resistant to wear and tear. Lastly, UA segments by the range of uses for their products.

Other major companies in direct competition (filling the same need, with the same products) include brands which have a focus on athletic apparel such as Athletica (a subsidiary of GAP with a focus on sports apparel), Under Armour (a supplier of sportswear and casual apparel), Nike (a retailing giant focused on footwear, apparel, equipment, accessories

Under Armour is a very famous sportswear company in the world. It sold products in three categories: apparel, footwear, and accessories. It had a wide variety of innerwear and outerwear in the apparel segment, a broad line of footwear, and a line of accessories for both men and women. Kevin A. Plank, the founder and Chief Executive Officer of Under Armour (UA), was a walk-on special team’s player for University of Maryland football team. As an athlete, he knew what kind of sportswear material would be popular for athletes. Under Armour created a new category of sports apparel: “performance apparel” which focused on the athlete’s performance. In this segment, it had a 78% market in 2009. Because, it paid more attentions on quality, performance

Under Armour’s (UA) current CEO Kevin Kant founded the company in 1996, which has witnessed the company grow in recent years to become a key player in the sporting gear and apparel industry. UA focuses its products and marketing efforts towards the youth, men, and women. The amount of resources that are allocated to each group of customers differs in that initially, UA primary source of revenue was from men even if youth and women products were also produced and sold. The specificity of UA’s products and their sporting activities selectivity can be attributed to UA’s limited global market share in the sporting gear and apparel industry. The company’s mission statement is inspiring, but in order to gain competitive advantages against larger

At some point in one’s life, he or she gets introduced to sports which have become a staple in society around the world. For example, most countries have a national team for different sports such as soccer, volleyball, and baseball. There are many companies like Addis, Reebok, and Asics that produce sportswear for every sport imaginable. Two of the biggest sportswear companies are Nike and Under Armour. Athletes and non-athletes all over the world use Nike and Under Armour products every day.

Under Armour’s continuous focus on innovation to develop products based on the growing needs and preferences of consumers has helped it to become a fully integrated athletic brand servicing all the needs of athletes. For instance, in 2011, the company introduced Charged Cotton products, which are made from natural cotton but perform like synthetic products and dry faster. Strom Fleece product line with a water-resistant that repels water, without stifling airflow was one of the innovation of Under Armour. In 2012, the company launched coldblack

As shown in Figure 2 of the Appendix, a Porter Five Force Analysis makes it clear that the overall rivalry within the athletic apparel industry is medium to high. Because Nike and Adidas already have a substantial amount of capital resources and other assets, Under Armour struggles against them to gain market share. 8Also, private labels of retailers and newer sports apparel companies could potentially pose a threat to Under Armour, but mostly due to the fact that Under Armour does not hold any fabric or process patents. This makes it extremely easy for any competitor to duplicate a product or process with no consequence. However, the threat of new entrants is not too troublesome within the industry because of the great capital cost required for branding, advertising, and meeting product demand. Furthermore, the sports apparel industry is in the maturity phase of the industry life cycle. This means that each company included in the oligopoly must

We, therefore, recommend that the company investment into the new growing trend of of “fashionable athletic wear” apparel, focusing primarily on their female customer base. This new female apparel line will hopefully boost future earnings by serving one of the fastest growing markets in the United States. In addition, it will hopefully attract more female customers, who still perceive the brand as being ‘male-centric’. Through thorough analysis, we believe that this the best course of action for the company because of several factors that contribute, but are not limited to this new trend such as the increase in health conscious, an increase in athletic wear apparel and the growing number of active gym members across the country.

Athletic goods industry still has unlimited potential and it is a growing industry at the moment. The sportswear is not limited to track and field anymore. It has become a daily-life goods that can be seen everywhere. Product diversification into fashion business opens up a new growth potential for athletic goods.

Under Armour is a very popular and well-known brand throughout the world, there are many reasons why this is the case and why they are very successful as a company. Under Armour creates value for their customers in many ways, one of these ways is with their basketball shoes. Customers wouldn't want to buy shoes if they didn't think it would be durable and a good shoe. Customers can trust Under Armour’s basketball shoe because it is a shoe that somebody in the NBA wears. This shows that someone is willing to trust their million-dollar contract with their shoes to help them get their well-earned money, and that shows to confidence in Under Armour. Under Armour also gives many different options that the customer can choose from. They offer different technologies, materials, and articles of clothing. There are many different technologies they have, but I will only list a few. One of these technologies is cool switch, this helps athletes perform longer because the clothing will keep them cool and save them from sweating as much which helps save energy. Also, they offer many different materials in case a customer is allergic to a certain type of material there is always another so that they don't lose a customer. They also offer all different types of clothing so that whatever you need they'll have. Based on this research it proves that Under Armour has done so much to get where they are and be as successful as they are.

Under Armour, has been true to its vision statement, to empower athletes everywhere, and also its mission statement, to make all athletes better through passion, design, and the relentless pursuit of innovation (uabiz.com). Under Armour following its vision and mission statement, can incur a great increase in revenue by expanding its market reach to a somewhat over looked sport called extreme sports (also referred to as action sports and adventurous sports). The extreme sports industry has turned into a multi-billion dollar industry and have activities perceived as having a high level of inherent danger. These activities often involve speed, height, a high level of physical exertion, and highly specialized gear. The

“Since 2013, Under Armour has spent nearly $1 billion acquiring three fitness and activity apps. The purchases of MapMyFitness, MyFitnessPal, and Endomondo are a part of Under Armour 's strategy of connecting with customers and increasing awareness and sales through its wholesale and direct-to-consumer channels” (Nijjar, 2016). “Under Armour intends to leverage the data from its 160 million registered Connected Fitness users to boost engagement and monetize these apps. The company is off to a good start in terms of growing its digital business. In its most recent quarter, revenue in its Connected Fitness category grew 119% to $18.5 million. Still, while Connected Fitness makes up less than 2% of the overall business, its absence would have resulted in an increase of 47% in overall operating income. In the first quarter of 2016, Connected Fitness ' contribution to operating income was a loss of $16.5 million” (Nijjar, 2016).